Correlation Between ScanSource and Tsingtao Brewery
Can any of the company-specific risk be diversified away by investing in both ScanSource and Tsingtao Brewery at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ScanSource and Tsingtao Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ScanSource and Tsingtao Brewery, you can compare the effects of market volatilities on ScanSource and Tsingtao Brewery and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ScanSource with a short position of Tsingtao Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of ScanSource and Tsingtao Brewery.
Diversification Opportunities for ScanSource and Tsingtao Brewery
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between ScanSource and Tsingtao is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding ScanSource and Tsingtao Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsingtao Brewery and ScanSource is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ScanSource are associated (or correlated) with Tsingtao Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsingtao Brewery has no effect on the direction of ScanSource i.e., ScanSource and Tsingtao Brewery go up and down completely randomly.
Pair Corralation between ScanSource and Tsingtao Brewery
Assuming the 90 days horizon ScanSource is expected to generate 1.27 times less return on investment than Tsingtao Brewery. But when comparing it to its historical volatility, ScanSource is 1.09 times less risky than Tsingtao Brewery. It trades about 0.2 of its potential returns per unit of risk. Tsingtao Brewery is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 587.00 in Tsingtao Brewery on September 19, 2024 and sell it today you would earn a total of 66.00 from holding Tsingtao Brewery or generate 11.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ScanSource vs. Tsingtao Brewery
Performance |
| Timeline |
| ScanSource |
| Tsingtao Brewery |
ScanSource and Tsingtao Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ScanSource and Tsingtao Brewery
The main advantage of trading using opposite ScanSource and Tsingtao Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ScanSource position performs unexpectedly, Tsingtao Brewery can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tsingtao Brewery will offset losses from the drop in Tsingtao Brewery's long position.| ScanSource vs. Fukuyama Transporting Co | ScanSource vs. Gold Road Resources | ScanSource vs. TEXAS ROADHOUSE | ScanSource vs. Broadridge Financial Solutions |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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